World Markets

South Africa's rand slips to 2-month low, stocks firm

Credit: REUTERS/THOMAS WHITE

South Africa's rand slipped to its weakest in two months on Tuesday, in a risk-averse mood amid fears over the pace of economic recovery as coronavirus cases surge.

Updates rand, bond prices; adds stocks

JOHANNESBURG, Aug 4 (Reuters) - South Africa's rand slipped to its weakest in two months on Tuesday, in a risk-averse mood amid fears over the pace of economic recovery as coronavirus cases surge.

At 1640 GMT the rand ZAR=D3 was 1.24% weaker at 17.3975 per dollar, after hitting a session low of 17.5350, its weakest since June 1.

"The COVID-19 pandemic still has the ability to shift market sentiment almost daily, giving rise to increased volatility, especially in emerging market currencies where there is no discernible long-term trend due to the sentiment changes," analysts at TreasuryONE said in a note.

"With the rand at the mercy of global movements, we expect the rand to continue to trade quite erratically within the R16.50 – R17.50."

Coronavirus infections continue to surge, with global cases crossing 18.35 million. The World Health Organization warned that the road to normality would be long, with some countries requiring a reset of strategy.

In South Africa, COVID-19 cases breached the 500,000 mark over the weekend, and the economy continued to show signs of a slower recovery as car sales and factory activity remained subdued.

On the bourse, the FTSE/JSE All Share Index .JALSH gained 0.75% to 56,249 points while the Top-40 Companies Index .JTOPI rose 0.74% to 51,951 points.

South African telecommunications giant, Telkom TKGJ.J closed up 4.87% to 28.00 rand, after the company announced it will now provide financial services.

Further gains were seen in the gold index .JGDLX, which rose 2.65%, with Harmony Gold Mining HARJ.J up 3.33% to 114.00 rand.

Bonds were weaker, with the yield on benchmark 2030 government paper ZAR2030= up 7 basis points at 9.350%.

(Reporting by Olivia Kumwenda-Mtambo and Tumelo Modiba; Editing by Lisa Shumaker)

((Olivia.Kumwenda@thomsonreuters.com; +27 10 346 1084;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest World Markets Videos

The UK's Plan to Fix the Economy

Sep 26, 2022

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More